Transfer Rumours January 2018 Transfer Window

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Saintmagic said:
I have never disputed where the money raised from player sales goes, its the extra £100m or whatever from TV rights that I question. I also don't really understand how clubs with similar revenue as us, but not the player sales, spend similar amounts to us and some offer larger wages. They must be bankrupt if Reed is to be believed that we are close to running at maximum.
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A lot of it would have gone into wages the last 3 season or so I'd imagine, given how many extensions we have given out. I think we are one of only 3 clubs that aren't in "debt" so there could be something too it. We can use any incoming money to expand our wage bill too so that may be what the club has done.
 
fran-MLs little camera said:
Interesting. I note that figures show a net spend on players and wages....with an increase in wages of 48 million over the last 4 years. Fans can be too simplistic with arithmetic and assume that money is being squirrelled out of the club. As our chairman said recently 40 million doesn't buy you 2 x £20 million players because you are paying twice the wages.
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In our first PL season we got £43m in TV money, last season we got £127m. A lot of the players we sold would have low 'book' value due to being signed for low fees or came through the academy (Schneiderlin, Clyne, Lallana, Shaw, Chambers etc) so of course spending money replacing them would lead to our accounts showing a higher 'investment' in the squad. <<< someone in finance should be able to confirm how that works.

Not to mention don't pay all wages up front and most clubs don't pay the whole transfer fees upfront, because that staggered payments are beneficial to both parties, usually.

Say we spend £20m on a player, we pay £10m upfront and two annual installments of £5m. We pay this player £50k pw on a 5 year deal.

Annual (Cash) Cost to club = £12.6m year 1, £7.6m Year 2, £7.6m year 3, then £2.6m for the last 2 years on the contract.
On the books it would work out at £6.6m annually: (£50,000 * 52)*5 = £13,000,000 + £20,000,000 = £33,000,000. £33,000,000 apportioned over 5 years = £6,600,000 pa.

Another thing to take into consideration is agent fees, but we are notoriously tight with those.

Stoke, Sunderland, West Brom, Leciester, Everton & West Ham all had higher wage bills than us in 2017. We should be able to match those clubs, as our turnover is about the same, if not higher than those clubs.
 
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Saint Sosa said:
Stoke, Sunderland, West Brom, Leciester, Everton & West Ham all had higher wage bills than us in 2017. We should be able to match those clubs, as our turnover is about the same, if not higher than those clubs.
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Not sure we should be seeking to emulate the business model of any of those clubs, with possible exception of Everton, who until recently have looke the epitome of the well run club.
 
Archers Road said:
Not sure we should be seeking to emulate the business model of any of those clubs, with possible exception of Everton, who until recently have looke the epitome of the well run club.
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The model of paying inflated wages for mediocre players? That seems like our business model to be honest. I'm glad we don't spunk big money on bad signings out of desperation (though Long for £12m at the time was shocking) but we're not run that differently. It's all club spin.
 
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Saint Sosa said:
The model of paying inflated wages for mediocre players? That seems like our business model to be honest. I'm glad we don't spunk big money on bad signings out of desperation (though Long for £12m at the time was shocking) but we're not run that differently. It's all club spin.
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According to a recent report we are 9th in terms of wage bill, paying on average almost £50,000 a week. Everton, Leicester and West Ham are above us but not by much.
 
San Pellegrino said:
According to a recent report we are 9th in terms of wage bill, paying on average almost £50,000 a week. Everton, Leicester and West Ham are above us but not by much.
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Yeah to be fair I've seen a couple of different figures tbh. All these reports would have VVD included in them so you can shave about £4m any of those figures.
 
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Saint Sosa said:
In our first PL season we got £43m in TV money, last season we got £127m. A lot of the players we sold would have low 'book' value due to being signed for low fees or came through the academy (Schneiderlin, Clyne, Lallana, Shaw, Chambers etc) so of course spending money replacing them would lead to our accounts showing a higher 'investment' in the squad. <<< someone in finance should be able to confirm how that works.

Not to mention don't pay all wages up front and most clubs don't pay the whole transfer fees upfront, because that staggered payments are beneficial to both parties, usually.

Say we spend £20m on a player, we pay £10m upfront and two annual installments of £5m. We pay this player £50k pw on a 5 year deal.

Annual (Cash) Cost to club = £12.6m year 1, £7.6m Year 2, £7.6m year 3, then £2.6m for the last 2 years on the contract.
On the books it would work out at £6.6m annually: (£50,000 * 52)*5 = £13,000,000 + £20,000,000 = £33,000,000. £33,000,000 apportioned over 5 years = £6,600,000 pa.

Another thing to take into consideration is agent fees, but we are notoriously tight with those.

Stoke, Sunderland, West Brom, Leciester, Everton & West Ham all had higher wage bills than us in 2017. We should be able to match those clubs, as our turnover is about the same, if not higher than those clubs.
Click to expand...

Player apportionment has been mentioned on here a few times in the past, but you’re quite correct that the transfer fee is declared in the annual accounts across the length of the players contract.

E.G. Van Dijk was signed in 2015 for £12m on a four year deal. So the accounts would show an expense of £3m for each of the next four years.
To make things more “interesting” Van Dijk signed a new five year deal a year later, which means Saints could have spread the expense of the remaining £9m over five years. Meaning only £1.8m coming out of last year.
Now he is sold and the asset is disposed the remaining £7.2m will have to be written off this year. The club will have to declare the income of the initial transfer fee(less sell on). They obviously won’t be able to book the incentives(app bonus etc) on until they’re completed

How the transfer fee is paid will be irrelevant to the clubs P&L accounts, but it will show as a long term debtor on the balance sheet
Can’t remember if it was discussed what the difference was between transfer fees owed and transfer fees due in the last set of accounts, but I’d imagine them to be favorable
 
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Yeah, our payroll is high not because we're paying spectacular sums to individual players, but because our roster has become bloated. That tends to be the undoing of smaller clubs, and it's why I'd like a bit of a clearout. Also worth noting that this was part of the reason behind the original Cortese plan to fill minutes with kids: he didn't think that you got in trouble by lavishing transfer fees, but by having an unwieldy payroll with a bunch of average players you can't move on.
 
saintlyhero said:
Player apportionment has been mentioned on here a few times in the past, but you’re quite correct that the transfer fee is declared in the annual accounts across the length of the players contract.

E.G. Van Dijk was signed in 2015 for £12m on a four year deal. So the accounts would show an expense of £3m for each of the next four years.
To make things more “interesting” Van Dijk signed a new five year deal a year later, which means Saints could have spread the expense of the remaining £9m over five years. Meaning only £1.8m coming out of last year.
Now he is sold and the asset is disposed the remaining £7.2m will have to be written off this year. The club will have to declare the income of the initial transfer fee(less sell on). They obviously won’t be able to book the incentives(app bonus etc) on until they’re completed

How the transfer fee is paid will be irrelevant to the clubs P&L accounts, but it will show as a long term debtor on the balance sheet
Can’t remember if it was discussed what the difference was between transfer fees owed and transfer fees due in the last set of accounts, but I’d imagine them to be favorable
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Also means that Academy players are considered to be without value until they're sold, given that they weren't purchased. Thus, from a paper profit standpoint, we made the most money in the first summer of selling, because we moved on players who registered as pure profit.

Thus, always look at cash flow, rather than topline profits, because the former really only matters in terms of taxation. Because of those accounting quirks it's entirely possible to turn a profit while hemorrhaging money, or show a loss while raking in cash.
 
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Schad said:
Also means that Academy players are considered to be without value until they're sold, given that they weren't purchased. Thus, from a paper profit standpoint, we made the most money in the first summer of selling, because we moved on players who registered as pure profit.

Thus, always look at cash flow, rather than topline profits, because the later really only matters in terms of taxation. Because of those accounting quirks t's entirely possible to turn a profit while hemorrhaging money, or show a loss while raking in cash.
Click to expand...

Profit is vanity, cash is sanity
 
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